Pro-Russia rebels are making decisive gains against Ukrainian forces in the east of the country, a turning of tides on the battlefield that Kiev says is due to Moscow providing direct military support.

The Ukrainians suffered fresh losses on Monday, abandoning the airport in the key city of Luhansk after it came under attack by what a Ukrainian military spokesman, Andriy Lysenko, claimed was "a Russian tank battalion".

There were also reports of fighting at Donetsk airport, while the Ukrainian army and volunteer battalions reported heavy casualties in recent days as they attempt to retreat from encirclement in the town of Ilovaysk.

The fighting on the ground overshadowed tentative efforts to bring the adversaries to the table in Minsk, where rebels reportedly indicated that they might be prepared to forswear outright separation from Ukraine in return for the largest measure of autonomy and self-determination.

The rebels have previously declared themselves independent statelets, but Russian agencies reported on Monday that they were putting forward a range of demands on regional self-determination and Russian language status in return for which they would be willing to discuss "the preservation of the united economic, cultural and political space of Ukraine".

Kiev is unlikely to give in to demands from the rebel leaders but the change of tone shows that having boosted the rebels militarily, Moscow may be looking for a compromise solution that still gives it sway over swaths of Ukraine. Even if the sides did agree, it is unclear whether all the units fighting on both sides would accept a compromise.

The Russian president, Vladimir Putin, said on Sunday that talks should begin on statehood for south-eastern regions, but his spokesman later clarified that Putin was apparently only talking about increased status within Ukraine. Putin again called for an immediate ceasefire.

The separatists are negotiating from a position of relative strength after recent fighting. Ukrainian forces have had the upper hand for much of the summer. But a rebel counterattack has generated fierce fighting around Luhansk and Donetsk and opened up another conflict front in the far south-east close to Mariupol.

The scale of the turnaround was becoming clear on Monday. Vladimir Ruban, a former Ukrainian officer in charge of negotiations on prisoner exchanges, said that 680 Ukrainian fighters had been captured in east Ukraine, with 80% of them taken in the area around Ilovaysk in recent days, but some have been able to break through the siege and escape. There are no reliable figures on the numbers who died.

Ukraine's defence minister, Valeriy Heletey, said that Kiev's forces would have won a military victory in the east by early October if Moscow had not stepped in to increase support for the rebels, using regular Russian army units for the first time.

"Our armed forces were defeating the bands of Russian mercenaries, and destroyed their spies and special agents. This is why the Kremlin was forced to move to a full-scale invasion with its regular army," he said.

Russia has denied its forces are in Ukraine, but western powers believe more than 1,000 Russian troops are operating in the east, along with scores of military vehicles.

The British prime minister, David Cameron, said on Monday that the presence of Russian troops in Ukraine was "unjustified and unacceptable". EU leaders at the weekend gave Russia a week to change course in Ukraine or face further sanctions.

In Mariupol, a major port city on Ukraine's southern coast, schools opened for the first day of the new term on Monday, as the city braced for a potential assault by rebel forces. Last week rebels, apparently aided by soldiers who appeared to be from the Russian army, seized the town of Novoazovsk further along the coast. Pro-Kiev residents have been digging trenches on the outskirts of town and promise to defend the city.

On Monday, armed rebels were checking cars in Olenivka, the first town on the road from Donetsk to Mariupol, after Ukrainian troops left the town overnight. In Volnovakha, the next big town on the road, there were neither rebels nor the Ukrainian army but the local police had removed the Ukrainian flag from its building as a precaution.

"Do you think we can resist armed people from the Donetsk People's Republic?" asked Dmytro, a local police officer, showing he and his colleagues had no guns in their possession.

After months of clashes, many locals are weary and suspicious of both sides of the conflict and simply long for a normal life again.

"I don't care if we are part of Russia, part of Ukraine or part of Mars," said Irina Filatova, as she took her daughters to school in Mariupol. "The main thing is that we can live in peace and all of this can finish."

In the rebel strongholds of Donetsk and Luhansk, the vast majority of schools did not open due to the chaotic situation, with regular shelling and shortages of water and electricity having created a humanitarian crisis in recent weeks.

A report released by Human Rights Watch on Monday said that the shelling of residential areas in Luhansk had resulted in over 300 civilian casualties since May. Both sides have Grad missiles and other heavy artillery, but the Ukrainians have come under particular scrutiny for their use of inaccurate artillery in builtup areas.

The Kremlin-sponsored Seliger youth camp hosts thousands of students to discuss politics and Russia’s future. But debate is scarce, especially when the president and foreign minister drop in to visit, writes RFE/RL